Getech Share Discussion Threads

[cockerhoop] 21/5/2014 18:10

I also attended the presentation (good to meet you Jamie - albeit really briefly as train to catch).

My view was somewhat different although I agree that the full year target 13/14 is a massive stretch so wouldn't be surprised if the price drops on a profit warning before the year end. Equally if they do hit then the price will obviously bounce as >6p Eps with net cash has to be cheap at the current price.

Regarding full year 14/15 I came out of the presentation thinking there's a good chance of a positive outcome for the following reasons:-

Globe2 which covers 3 years from 31st July 2014 will be more expensive than Globe which expires on the same date, the revenues will be front end loaded but will provide revenues across the 3 year licence period giving some earning visibility to July 2017. Raymond was very bullish that the current clients will sign up to the new product which has benefits over the current Globe system.

It was interesting to note that sales don't have a standard gross margin. Some data was obtained for free whilst other data is sold on a profit share basis with the owner of the data source (lower margin) which can lead to variable margins as well as lumpy revenue if you get my drift.

Raymond did stress that they believed that H1 was a blip so i'll be pretty disappointed if they don't have a decent H2 of this year.

[jamielein] 21/5/2014 16:34

I attended the presentation and it wasn't clear to me how they could maintain a high level of recurring income with their current business model.

Sales are very lumpy and they rely too much on a few big sales, which is probably why they missed their half year targets and imo will miss full year too.

They employ a lot of scientists but I don't get the impression that they have much business acumen.

Overall, even though I've been a past holder, I won't be investing again.

edit: forgot to mention they also have a high fixed cost base. margins are high but that's only good if you're winning lots of business. if things start to go badly I wouldn't be surprised to see a loss, which will eat into their cash pile.

[deanowls] 21/5/2014 15:40

Any news from the presentation, or is the drop in price news enough?

[shanklin] 21/5/2014 15:02

Certainly jam last year when things were going well.

[bullsvbears] 21/5/2014 13:18

A bit diffident when it came to the current cash position. Unusual at a presentation such as this.

Jam tomorrow?

[sharesoc] 23/4/2014 16:45

Just a reminder that it would be great to see some shareholders and even potential investors of Getech at ShareSoc-Hardmans joint company seminar in Leeds on the 20th May. More details at... hxxp://www.sharesoc.org/events.html

[bookbroker] 15/4/2014 16:10

If that's the case they need to look long and hard at these costs, even if it means making some cutbacks, staff and other overheads, if the business levels are slack, then it's time to ensure that admin costs kept to a minimum, they had a nice cash cushion, that is being eaten into, have talked about acquisitions before and no joy, a shame to see the cash used in the running of the business!

[trident5] 14/4/2014 21:40

"Why are their expenses so high relative to the income".

Income seems relatively low, and most of their admin. expenses are probably fixed costs.

[bookbroker] 14/4/2014 20:21

This co. needs to slash its admin. budget, why are their expenses so high relative to the income, time the management started setting themselves a challenge, rather than showing up for work with a smug little smile on their faces, off the gravy train lads and shapen up!

[janeann] 09/4/2014 13:07

Thanks sharesoc - may try and go.

Pleaseing to see Hargreaves Hale upping their stake

[sharesoc] 09/4/2014 10:49

Shareholders and potential investors in Getech will probably be interested in attending this event run jointly by ShareSoc and Hardman and co. The seminar taking place in Leeds on the 20/05/14, copy link: hxxp://www.sharesoc.org/events.html

[shanklin] 01/4/2014 08:06

H1 Profit seems to be down by slightly more than the yoy reduction in sales, so they have clearly got some additional overhead. I guess much of the lost sales would be very high margin.

[woodcutter] 21/2/2014 09:16

I've taken a small punt this morning. There's clearly a risk to the downside particularly with the operational gearing but the cash on the balance sheet provides some measure of comfort and further falls could be an additional buying opportunity.

The order flow might be lumpy but the one thing about lumpy order flow is at some stage the orders arrive and with this kind of operational gearing the eps will improve substantially and the share price will rise.

On the TA side yesterdays hanging man looks to have provided strong support bouncing of the previous support level at 60p. It's also way outside the outer bollinger bands and the RSI is well below the over sold range which suggests the drop is over done.

aimho

Woody

[pugugly] 20/2/2014 13:14

Dragonsteeth:> But they are the house broker and their note is cautious for a house broker (imo) with words such as "will understandably leave investors more cautious in the short term until certainty has emerged that customers have indeed returned to more normal order patterns."

If the house broker does not HAVE clarity what chance the PI

Very much on the side "the uberbear"

[dragonsteeth] 20/2/2014 12:33

stewy, WH Ireland are suggesting 6p per share earnings based on £2.4 mill profit and a dividend of 2.10p . On a P/E of 12 that equates to 72p and a 2.9% divi. The unknown of course is whether this will be achieved. The transparency of GTC has always left something to be desired, and we know that PR etc is not one of their strengths. While the share price is moving steadily upwards you can roll your eyes and think "scientists!" and grin and bear it. Over the years they have provide more " nice " than "nasty" surprises, so it will be interesting to see just how they react to the very poor RNS.

[stewy_18] 20/2/2014 12:15

GTC is prone to precipitous drops. I you believe this is just a blip it is a great buying opportunity. Half yearly revenues will be down but with reverse gearing in play profits will be dispropotionately impacted. If you think the will hit their year end revenues then, GTC is great value at this price. A 10 % increase in revenues should lead to a 40 % ish increase in profits and about 7 pence earnings per share.

It is how you see the outlook long term and that (for me) is the fustrating thing. It is very difficult to predict and the company do not give clear forward looking statements.

I am watching from the sidelines with interest.

[bookbroker] 20/2/2014 11:56

The mkt. has not waited, it's a case of shoot first, worry about the consequences later, effectively they've taken the view that profits are going to be impacted at the full year, so let's be prepared!

[pugugly] 20/2/2014 11:23

Agreed; The key words are "SUBJECT TO". My sales managers always used these words when asked if they were going to hit budget and then stated that they had warned us when they failed.

Mr Market is applying the same caution. Worry for me is that there appears to be a cutback on new exploration and (imo) jury is still out on whether this is a "must have" or "nice to have" technology.

[rcturner2] 20/2/2014 11:11

"subject to the conversion of a number of leads already in the sales pipeline, the Directors believe that the Company will still trade in line with expectations for the full year."

I think the market is saying "lets wait and see".

[janeann] 20/2/2014 11:10

H1 revenue downby 25% and a nearly 40% fall in sp; has to be overdone in my view

[bookbroker] 20/2/2014 11:07

Interesting thing is the mkt. took that update with a pinch of salt, the paragraph including 'that profits would be in line with current forecasts' they did not believe, and hence the share price was hammered, however if the board are not far off then these are way too low,and there should be a deal of upside to mid 70s.

[bookbroker] 20/2/2014 10:32

Even at this price, this could be vulnerable to a takeover, it's an absolute minnow in terms of its scale, but could make a complementary bolt-on to a co. in the oil services sector.

[bookbroker] 20/2/2014 09:59

Well I acquired some of these a year or two back, sold out last year, but despite the recent profits warning, I agree that a 40% drop on the basis of a cooling in orders, the cos. that participated in the original globe programme cannot I believe have decided that they are not getting value for money just like that(excuse the Tommy Cooper euphemism), one assumes that like many businesses providing products such as GTC you see ebbs and flows with ordering patterns, a higher oil price and an improving global economy(if that's what we're seeing)will one assumes drive more demand in the exploration and discovery phase. With £4m cash that now constitutes 25% of their value, they are making reasonable profits, admittedly the second half needs an uptick, the market appears to be pricing practically negative growth but their business is better established than it was two years ago, we'll have to see but take out the cash and you're looking at a price of 45p currently!

[courant] 20/2/2014 09:56

This looks properly overdone to me - I've just bought at 59.5p. There's long-term value in the data set and short-term half-yearly sales figures aren't a good reflection of that.

[superbobtaylor] 20/2/2014 09:44

I sold out a while back as I thnk it was obvious that this year was not going to be as good as last; none of the "We have sold some data" RNSs for a while.

However this must be getting to point where the fall is overdone. I am watching with interest.......

SBT